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HQ2 Take Two, Trump Ad, Digital Tax: CEO Daily for November 6, 2018

Good morning.

I’m starting this Election Day in Montreal, where Fortune’s Most Powerful Women International Summit got underway yesterday. Prime Minister Trudeau joined the group for dinner, and was asked by Fortune’s Nina Easton whether the U.S. corporate tax cut had left Canada uncompetitive in vying for foreign investment. “Tax rates aren’t the only thing companies look at when they invest,” he said. “We can give you a visa in Toronto in two weeks for your top talent. We are a country that is open to immigration. That’s an advantage I don’t see the U.S. competing with any time soon.” Amazon, are you listening?

Lockheed CEO Marillyn Hewson headlined the event. She said in her travels around the world, both government and corporate leaders have told her that “this is one of the most unpredictable and chaotic threat environments they have seen since the Cold War.” Having spent my weekend debating the effects of AI on society, I asked her the two questions that divided the group I was with: 1) What does she think about the Google engineers who signed a letter refusing to work on AI-powered weapons systems, and 2) does she believe that autonomous weapons should not be empowered to make kill decisions without human involvement. On the first point, she took on the Google gang. “You don’t have trade and growth if you don’t have security.” But on the second, she sided with those who believe “it is important to have a human in the loop.”

And speaking of my weekend in AI-land, I owe an apology to Garry Kasparov for misspelling his first name, and Tom Siebel for misspelling his last. There is no excuse for it…although I do find myself writing these essays at odd hours.

More coverage of the Montreal event here. More news below. And if you are in the U.S., be sure to vote.

Alan Murray

Top News

HQ2 Take Two

Amazon will reportedly split its second headquarters between two cities, in order to be able to hire more tech talent. It still hasn’t said which two cities, although the Wall Street Journal reports that the search’s results may finally be announced this week. Bloomberg‘s sources say it’s Long Island City and the Crystal City area of Arlington in northern Virginia. WSJ

Trump Ad

Facebook and TV networks—including Fox News—pulled a racist Donald Trump ad that associated migrants heading north through Mexico with an illegal immigrant who killed two U.S. police officers in 2014. CNN called the ad racist and never ran it. NBC pulled it, saying it was “insensitive.” Fox didn’t explain why it was pulling it. Facebook won’t take paid promotions of the ad anymore, but it will allow people to share it. Reuters

Paid Vacation

If an employee in the EU dies without having claimed all the paid vacation time they were owed, their heirs can claim a payout from the employer. That’s the gist of a ruling issued this morning by the Court of Justice of the European Union, the EU’s top court, which was deciding a case about two German widows. Fortune

Digital Tax

The idea of a revenue tax on Big Tech has split countries in Europe, but France—a key proponent of such a tax—is not backing down. French Finance Minister Bruno Le Maire: “We want the adoption of the directive on digital taxation by the end of this year. This is a clear red line for the French government.” Reuters

Around the Water Cooler

Gates Toilets

The Bill & Melinda Gates Foundation has spent $200 million on sanitation research, and on Tuesday Bill Gates showed off 20 new toilet and sludge-processing designs at the Reinvented Toilet Expo in Beijing. This is serious stuff. As Bloomberg notes: “Every dollar invested in sanitation yields about $5.50 in global economic returns, according to the World Health Organization.” Bloomberg

Chinese Lessons

Starbucks CEO Kevin Johnson says the company will apply to the U.S. lessons it learned in China, particularly as regards delivery, where Starbucks deliveries apparently arrive at the same temperature customers would expect in-store. CNBC

Gaming Age

China’s Tencent is reportedly tightening its controls on kids’ use of online games. It introduced a registration system for one popular game this year that will be rolled out across all its games by 2019. The system will allow kids under 12 to only play for an hour each day, and will impose a night-time “curfew” on older players. Chinese authorities are very worried about the effects of gaming addiction. BBC

Diverse Midterms

New American Economy director Jeremy Robbins writes for Fortune that demographic change—even just over the past couple years—could have a significant effect on today’s midterms. “Past election data shows that minority voters are not beholden to any one party, and there are many factors besides demographics that will decide 2018’s races,” he writes. “Rather, [the numbers] illustrate that in such tight races, candidates cannot afford to ignore the increasingly diverse pool of voters they seek to represent.” Fortune

This edition of CEO Daily was edited by David Meyer. Find previous editions here, and sign up for other Fortune newsletters here.